Canadian vs. American Banking System

[TheTeenageMuse]

Took an online course, this is my final essay topic.

Not yet sure what my thesis will be (Canadian banks are safer?). But if you know any differences offhand that would be great.

Like:

We have more regulations.
You have more banks in general (Canada has 6 big ones)
We are conglommerated.

But these aren't really differences in the systems are they?

 

[katred]

They aren't entirely different systems, but the points you raise are very important in terms of how the banks can do business. Not only the banking system is more regulated, but things like mortgages and interest rates on credit cards are more strictly controlled in Canada as well. That makes some pretty big differences between how the systems function.

I think that the way both systems grew historically has a lot to do with the way they're run now. Canada's banking system was always more centralised, whereas the American one was more fragmented. America as a rule tends to resist pushes towards a central power and maintaining independent banks (or at least nominally independent, since most were loosely linked to much larger banks) was a way of maintaining a distance from the power of the federal government. In general, power over such things has always been the purview of the states, which allowed less scrupulous businesses to move to whichever states offered them the fewest impediments and the most advantages.